Limitless to pay banks, trade creditors Dh2.07b

Dubai: The Dubai Government-owned developer Limitless will pay Dh2.07 billion immediately towards its debt obligations to banks (Dh1.9 billion) and trade creditors (Dh176 million) as part of a restructuring proposal it has put up. Ninety per cent of its creditors have already agreed to the plan and the rest could soon follow as the details are made clear, a top official said.

The proposal — after several rounds of negotiations — includes paying Dh411 million ahead of the intended due date in December this year.

“The payments will be made subject to receiving the approval from all the creditors, which I am sure will happen — I don’t expect any problems when we put it to the banks tomorrow [Tuesday],” said Ali Rashid Lootah, the Limitless Chairman. (He also heads Nakheel, which last year unveiled a dramatic move to pay off all its bank obligations well ahead of schedule.) ”There are much better possibilities to be had with the new plan than the earlier one.”

The Limitless proposal now envisages completing all of its bank debt pay-off — totalling Dh4.45 billion — by 2018 as opposed to 2016, which was the earlier plan. If the plan clicks with the banks — there are 18 involved in total with 60 per cent being local entities — it will cap the last major restructuring of the debt exposures racked up by Dubai entities after the financial crisis. (That owed to trade creditors total Dh576 million.) If a deal is struck, Limitless’ target is to be debt-free by December 2018 and turn into profit before that, according to Lootah.

The developer raised the funds by selling 50 per cent of its 14 million square metre land bank in Riyadh. It also has ongoing large-scale projects in Russia and Vietnam — none of the land bank there was sold as part of the repayment process — apart from the 6.5 million square metre Downtown Jebel Ali master-development in Dubai, which is now picking up pace.

On what the developer intends to do to square off the remaining debt, Lootah said, “All options are open — further land sales, develop our land bank in Dubai such as Downtown Jebel Ali, etc. These plans ae very much achievable.

“We have the cash on hand to carry out the planned developments in Dubai … whatever has been sold so far were done at good prices. Once the infrastructure works start, sales will pick up further. The closeness to the new airport and Expo 2020 site are all major advantages the development will have.”

The infrastructure works contract was awarded recently, for Dh285 million. The developer also confirmed that it is changing the mix at some of the buildings with the project, opting for a cluster of four residential — with around 1,200 apartments — as opposed to the earlier plan for mixed-use. An all-residential offering will play better in the current market environment, officials said. It will take two years to complete.